An empirical examination of forecast disclosure by bidding companies

This paper examines voluntary disclosure of profit forecasts by bidding companies during takeovers. Disclosure is examined from two perspectives: (i) factors influencing disclosure and (ii) the influence of good news and bad news on disclosure. Takeover documents published during 701 takeover bids for public companies listed on the London Stock Exchange in the period 1988 to 1992 were examined. Two variables accounted for almost all the influences on disclosure of forecasts: bid horizon and type of bid. Probability of forecast disclosure was greater the shorter the bid horizon and during contested bids. In addition, there was some evidence that the nature of the purchase consideration offered by the bidder (cash or paper) and the industry of the bidder influenced disclosure. Disclosure was significantly more likely in paper bids and in the durable goods industry. Forecasts were more likely to be disclosed when firms had good news to report.     

Learning by lending

This paper studies bank learning through repeated interactions with borrowers from a new perspective. To understand learning by lending, we adapt a methodology from labor economics to analyze how loan contract terms evolve as banks acquire new information about borrowers. We construct “proxy” variables for this information using data from borrowers’ out-of-sample, future credit performance. Due to the timing of their construction, banks could not have used these variables directly to price loans. We nonetheless find that these proxies increasingly predict loan prices as relationships progress, even after controlling for possible omitted variable bias. Our methodology provides strong evidence that: (a) bank learning affects loan prices, and (b) relationship benefits are heterogeneous. In particular, higher quality borrowers face differentially lower spreads as their relationship with lenders develop – and banks learn about their quality – while lower quality borrowers see loan prices increase and their loan amounts fall. We further find suggestive evidence that banks incorporate CEO-specific information into loan prices.     

Learning by Disinflating

Disinflationary episodes are a valuable source of information for economic agents trying to learn about the economy. In this paper, we are particularly interested in how policymakers can themselves learn by disinflating. The approach differs from the existing literature, which typically focuses on the learning of private agents during a disinflation. We build a model where both the policymaker and private agents learn, and ask what happens if the policymaker has to disinflate to satisfy a new central bank mandate specifying greater emphasis on inflation stabilization. In this case, our results show that inflation may fall dramatically before it gradually rises to its new long‐run level. The potential for inflation to undershoot its long‐run level during a disinflationary episode suggests that caution should be exercised when assessing the success of any change in the policymaker's mandate.     

中国企业的跨国竞购——卖方主导市场中的交易策略

目前,国家正在大力支持企业积极稳妥地通过并购国外企业,获取能源、矿产等资源,获得国际知名品牌、先进技术以及营销网络,实现规模和市场的有效扩张.在本文中,信保专家将与大家共同探讨当今国际并购市场的实务问题     

The economics of club bidding and value creation

Many acquisitions are conducted by clubs, i.e., coalitions of acquirers that submit a single bid. We present a novel analysis of club bidding where the club creates value by aggregating, at least partially, bidders' values. We show that club formation can lead to higher acquisition prices when the number of bidders is exogenously fixed and large. However, when entry costs require bidders to optimize their participation decisions, club formation acts as an endogenous limit on competition and reduces the target's premium. In contrast, social efficiency with club bidding is always higher. Our findings can reconcile the contradictory evidence on club bidding.     

Subcontracting and competitive bidding on incomplete procurement contracts

This article examines the impact of incomplete contracts on subcontracting and the design of procurement auctions. I estimate the effect of ex post contract revisions on unit costs for both subcontracted and in‐house performed work items on bridge projects procured by the California Department of Transportation. I model a scoring auction showing how ex post revisions skew bidding decisions and estimate unit costs from bid data using the method of sieve estimation. The results highlight the cost implications of incomplete contracting frictions, subcontracting decisions, and bidding distortions. In conclusion, I propose alternative auction mechanisms that could improve outcomes.     

The demand for agricultural land and strategic bidding in auctions

A unique feature of land auctions is that the same land is auctioned twice; first the land is broken into tracts and each tract is auctioned individually. Then, the tracts are reassembled and auctioned as a whole parcel. After the two auctions are completed, the seller chooses the one that generates a higher revenue. The main purpose of this paper is to provide an explanation of why such an auction design is employed to sell farmland. We also show that this feature of land auctions leads to interesting interaction among the bidding strategies of the players in each of the two auction stages.     

Takeover bidding with toeholds: the case of the owner's curse

This article demonstrates that a potential acquirer with a toeholdbids aggressively and possibly overpays in equilibrium. Theaggressiveness of a bidder with a toehold increases furtherif he is able to renege on his winning bid. A bidder withouta toehold, however, responds by shading his bids. The targetfirm can increase competition and the expected sale price ifit only entertains nonretractable bids. This article providestestable implications on the probability of bidder success,stock price reactions on bid revisions and on resolution ofthe contest, and expected gains to bidders and the target firm.     

Conditional returns to shareholders of bidding firms: an Australian study

This study examines the importance of the self‐selection problem when evaluating returns to bidder firms around announcement events. Takeover announcements are not random because managers decide rationally whether to bid or not, which indicates announcements are timed; consequently, in the presence of the sample selection problem, standard ordinary least square estimates are biased. Using a conditional model, the results indicate that after controlling for the self‐selection bias effect, shareholders of bidder firms make normal returns. In sum, failing to account for sample selection bias may lead to erroneous conclusions about a bidder's true economic wealth effects around an announcement event.     

Learning by Failing: A Simple VaR Buffer

We study in this article the problem of model risk in VaR computations and document a procedure for correcting the bias due to specification and estimation errors. This practical method consists of “learning from model mistakes”, since it dynamically relies on an adjustment of the VaR estimates – based on a back‐testing framework – such as the frequency of past VaR exceptions always matches the expected probability. We finally show that integrating the model risk into the VaR computations implies a substantial minimum correction to the order of 10–40% of VaR levels.     

An economic analysis of competitive bidding for public sector audit engagements

This study presents and tests an equilibrium pricing model for a public sector audit engagement. The bidding model's predictive accuracy was evaluated by comparing its predictions to the actual bids for a public sector audit engagement and to the predictions of an OLS regression model. The results are that predicted bids exhibited considerable variability and that associated prediction errors were sensitive to the underlying cost parameters. While the bidding model provided reasonably accurate predictions for the entire group of firms, it systematically overestimated the winning (lowest) bid. Possible explanations for this result are advanced and empirical implications are discussed.     

Serial acquirer bidding: An empirical test of the learning hypothesis

Recent academic studies indicate that acquirers' cumulative abnormal returns (CAR) decline from deal to deal in acquisition programs. Does this pattern suggest hubristic CEO behaviors are significant enough to influence average CAR patterns during acquisition programs? An alternative explanation is CEO learning. This study therefore tests for learning using successive acquisitions of large U.S. public targets undertaken by U.S. acquirers. A dynamic framework reveals that both rational and hubristic CEOs take on average investor reactions to their previous deals into account and adjust their bidding behavior accordingly. These results are consistent with a learning hypothesis.     

审计服务招投标程序与方法

近几年,我国注册会计师执业领域,出现了委托人(包括政府和其他投资人)以招标方式选聘会计师事务所的做法。追溯历史,这种做法并非我国首创,西方发达国家早在20世纪60年代就已将其作为一     

A law and finance theory of strategic blocking and preemptive bidding in takeovers

This paper uses a law and finance approach to develop a new takeover theory that formalizes the idea that large target shareholders, who can block a takeover attempt, exercise a strategic influence on tender offer prices, and thereby, on the distribution of the takeover gain. The theory captures the interaction between legal rules, target ownership structure, bidder toehold and potential effects of arbitrageurs in an endogenously determined bargaining parameter that predicts a skewed distribution of the gain in favor of target shareholders. In a regression model, the parameter has significant explanatory power, specifically when the total takeover gain is positive.     

Learning Portfolio Management by Experience: University Student Investment Funds

In this age of greater cooperation between academia and industry, it is surprising to find a general lack of awareness by both parties as to the progress being made to closely integrate financial theory with practice. This paper is intended to bring colleagues in universities and business up to date in an area where considerable success has been achieved, namely, investments and portfolio management. Through a survey of universities across the country, a comprehensive list of programs that allow students to manage portfolios of real dollars has been compiled. It is hoped that sharing the results of this survey will encourage further cooperation in establishing new innovative programs in all areas of business.     

从中海油竞购优尼科看中国企业"走出去"--专访耶鲁大学金融学教授陈志武

中海油竞购优尼科是人们关注的热点是一件很正常的事情,但这个事件所引发的问题远远超过事件本身,是一个涉及到中国企业究竟如何走出去的战略性大问题     

学术·学风·学习

海到无边天做岸 ,山登绝顶我为峰。当我们望见 2 0 0 4年东升旭日的第一缕曙光的时候 ,就是辞别那镌刻着我们太多记忆的2 0 0 3年之际 ,就是我们《税务与经济》走过自己的四分之一世纪年华开始之时。回首过去 ,展望未来。我们深切地感到 ,办好一个学术期刊 ,必须崇尚学术 ,端正     

Learning by doing: a case study of qualitative accounting research

The increasing number of master's degrees in accounting as well as specialist MBA's mean that an understanding of research methods is now an important part of the toolkit of accounting educators. In the literature there has been an increasing interest in qualitative accounting research. Whilst this interest has been mirrored by an increase in qualitative methods textbooks, less is known about the experience of undertaking such research. This presents a problem for educators, as they need material for students to work with and analyse before they are able to design their own research projects. This paper presents a case study based upon an extensive piece of qualitative research concerned with the use of accounting information in decision-making processes in banking. Review, exploratory and application questions provide a framework through which the case study can be used as a learning resource for accounting educators, supervisors and students.